3 key ways to boost your finances before retiring

Cut your debt down to size, get your spending under control, and get serious about your super.

When planning your retirement, the earlier you start preparing, the better. And luckily, the steps you can take to boost your finances before retirement aren't very complicated.

You can consider ways to reduce your debt, improve your finances, and boost your super.

Following these three steps could help you fund a better retirement and improve your financial wellbeing one step at a time.

1. Consider ways to reduce your debt

Reducing your debt could help you take your super further in retirement.

There are two approaches you could take to tackle your debt: the avalanche or snowball method.

Avalanche

Using the avalanche method means you start paying off the biggest debt first. So, you might focus on large debts with high interest (say, a big credit card balance) or very large debts like your mortgage. Then, once you've paid off your largest debt, you can focus on the second biggest and keep repeating this process until your debts have been paid off.

Reducing these as much as possible could have a positive impact on your finances.

Snowball

The snowball approach means tackling your smaller debts first. Then once you've paid off your smallest debt, you shift focus to the next smallest and repeat.

This could be a small credit card debt, the remainder of a personal loan, or a buy now, pay later balance that won't go away.

Both the snowball and avalanche approaches can work well depending on the nature of your debts.

If you have lots of smaller debts, then the snowball approach could help you pay them off sooner. But if you have larger debts, like a mortgage, then consider the avalanche method so those big debts are your focus.

There's also information available about how to manage debt in conjunction with retirement, not just your housing.

2. Improve your finances

There are many steps you can take to boost your finances, which can help you big time by retirement.

You could:

• Review your monthly spending. You might be shocked to find that subscriptions, bills or eating out are costing you more than you think. Check your banking app or budget to become aware of your monthly spend so you can make some smart changes.
• Make a budget or update your existing one. Once you've got a better idea of your spending habits, you can draw up a budget. Break your spending down into the major categories and put a rough dollar amount on each. By having a budget, you're taking the first step to keeping your spending under control.
• Switch to cheaper plans and products. There may be cheaper options available to you for pretty much all areas of your life. We're talking energy bills, phone plans, internet, health insurance or even groceries! Compare your current services or products, then find cheaper options and make the switch.

3. Boost your super

The earlier you start taking your super seriously, the better off you'll be come retirement. You can see it in action with a super calculator.

And it's a lot easier than you think. Here's what you can consider doing to grow your super:

• Chase up any lost super. If you've been in the workforce for decades, you might have super accounts with other funds you might not know about. You can search for lost super or forgotten accounts through mygov.

• Consolidate your super funds. If you have multiple super accounts, then you are paying multiple fees and watering down your nest egg. If you decide to consolidate, consider if this is the right move for you and how it might impact your insurance, investments, and tax.

• Review your super fund. Make sure your super fund is performing for you. This means checking and comparing net returns to make sure your fund is getting a good return compared to the average.

• Start making extra contributions. You could consider making extra contributions to your super. And the earlier the better, because money invested over decades has more time to grow. Even a small monthly contribution can leave much better off come retirement time. But don't forget to consider the relevant thresholds and caps. Going over these limits might reduce any tax benefits you could receive!
• Consider downsizing. As you near retirement, the time may come to consider downsizing. You might not need a big family home as you get older, and you may benefit from a smaller and more manageable property. Plus, you could contribute some of the sale of your home to your super, if you're eligible.

Want more tips on how to grow your super before retirement? Then you can head to the Super Helpful Retirement Hub from Aware Super.

It's never too late to put you and your super in a better position by retirement. You've got this!

Learn more about boosting your finances before retirement with Aware Super

General advice only. Consider your objectives, financial situation, or needs, which have not been accounted for in this information and read the relevant PDS and TMD before acting.

Issued by Aware Super Pty Ltd (ABN 11 118 202 672, AFSL 293340), trustee of Aware Super (ABN 53 226 460 365).